Perry Ellis International Inc. (PERY, Financial) filed Quarterly Report for the period ended 2008-10-31.
Perry Ellis International Inc. is a leading designer distributor and licensor of a broad line of high quality men's and women's apparel accessories and fragrances. The company's collection of dress and casual shirts golf sportswear sweaters dress and casual pants and shorts jeans wear active wear and men's and women's swimwear is available through all major levels of retail distribution. The company through its wholly owned subsidiaries owns a portfolio of nationally and internationally recognized brands including Perry Ellis Jantzen Cubavera Munsingwear Savane Original Penguin Grand Slam Natural Issue Pro Player the Havanera Co. Axis Tricots St. Raphael Gotcha Girl Star and MCD. The company enhances its roster of brands by licensing trademarks from third parties including Dockers for outerwear Nike and JAG for swimwear and PING and PGA TOUR for golf apparel. Perry Ellis International Inc. has a market cap of $107.45 million; its shares were traded at around $6.84 with a P/E ratio of 4.58 and P/S ratio of 0.12. Perry Ellis International Inc. had an annual average earning growth of 11.9% over the past 10 years. GuruFocus rated Perry Ellis International Inc. the business predictability rank of 3.5-star.
Interest expense. Interest expense for the three months ended October 31, 2008 was $4.4 million, an increase of $0.3 million, or 7.3%, from $4.1 million for the three months ended October 31, 2007. The slight increase in interest expense during the third quarter is primarily attributable to the increase of the average balance in our senior credit facility partially offset by lower interest rates. Interest expense for the nine months ended October 31, 2008 was $13.1 million, a decrease of $0.8 million, or 5.8%, from $13.9 million for the nine months ended October 31, 2007. The overall decrease in interest expense is primarily attributable to the overall reduction of the average balance and average rate in our senior credit facility for the nine months ended October 31, 2008. We began the first fiscal quarter of 2009 with no borrowings on our senior credit facility and ended the third quarter with $48.2 million as of October 31, 2008.
Net cash used in operating activities was $7.1 million for the nine months ended October 31, 2008, as compared to cash provided by operating activities of $52.7 million for the nine months ended October 31, 2007. The decrease of $59.8 million in the level of cash provided by operating activities for the nine months ended October 31, 2008, as compared to the nine months ended October 31, 2007, is primarily attributable to a decrease in net income of $9.6 million, an increase in accounts receivable of $14.0 million, an increase in prepaid income taxes of $8.2 million, and the reduction of accounts payable, accrued expenses and other liabilities in the amount of $22.1; partially offset by a decrease in inventory of $16.7 million due to tighter controls in inventory planning and an anticipated reduction in certain replenishment programs. For the nine months ended October 31, 2007, accounts receivable decreased $10.4 million, inventory decreased $17.1 million, and unearned revenues increased $16.8 million; these amounts were offset by the reduction of accounts payable, accrued expenses and other liabilities in the amount of $17.9 million.
Net cash used in investing activities was $42.5 million for the nine months ended October 31, 2008, as compared to cash used in investing activities of $12.2 million for the nine months ended October 31, 2007. The net cash used during the first nine months of Fiscal 2009 primarily reflects the purchase of property and equipment in the amount of $8.5 million and the acquisition of the C&C California and Laundry by Shelli Segal brands and inventory for $33.6 million, as compared to net cash used in the amount of $12.2 million during the same period in Fiscal 2008 for the net purchase of marketable securities and property and equipment. We anticipate capital expenditures during fiscal 2009 of $12 million in technology and systems, retail stores, and other expenditures.
Net cash provided by financing activities for the nine months ended October 31, 2008, was $45.5 million, as compared to net cash used in financing activities for the nine months ended October 31, 2007 of $38.1 million. The net cash provided during the first nine months of Fiscal 2009 primarily reflects the net borrowings on our senior credit facility of $48.2 million and the proceeds received from the exercise of stock options of $3.8 million, offset by the payments of $1.3 million on our mortgages, purchase of treasury stock of $5.7 million and a payment of a loan to a minority interest partner of $0.6 million. The net cash used in financing activities for the nine months ended October 31, 2007, primarily reflects the net payments on our senior credit facility of $38.3 million. The use of cash was offset by proceeds received from the exercise of stock options of $0.7 million. In September 2008, the Board of Directors extended the stock repurchase program, which authorizes us to repurchase up to $20 million of our common stock for cash over the next twelve months. Although the Board of Directors allocated a maximum of $20 million to carry out the program, we are not obligated to purchase any specific number of outstanding shares, and will reevaluate the program on an ongoing basis. Purchases under this plan have amounted to $9.8 million through October 31, 2008.
In October 2008, we amended our senior credit facility. In connection with the amendment, we paid approximately $338,000 in financing fees. These fees will be amortized over the term of our senior credit facility. The following is a description of the terms of our senior credit facility with Wachovia Bank, National Association, et al, as amended, and does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions of the senior credit facility: (i) the line is up to $125 million with the opportunity to increase this amount in $25 million increments up to $200 million; (ii) the inventory borrowing limit is $75 million; (iii) the sublimit for letters of credit is up to $40 million; (iv) the amount of letter of credit facilities available outside of the facility is $110 million and (v) the outstanding balance is due at the maturity date of February 1, 2012.
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Perry Ellis International Inc. is a leading designer distributor and licensor of a broad line of high quality men's and women's apparel accessories and fragrances. The company's collection of dress and casual shirts golf sportswear sweaters dress and casual pants and shorts jeans wear active wear and men's and women's swimwear is available through all major levels of retail distribution. The company through its wholly owned subsidiaries owns a portfolio of nationally and internationally recognized brands including Perry Ellis Jantzen Cubavera Munsingwear Savane Original Penguin Grand Slam Natural Issue Pro Player the Havanera Co. Axis Tricots St. Raphael Gotcha Girl Star and MCD. The company enhances its roster of brands by licensing trademarks from third parties including Dockers for outerwear Nike and JAG for swimwear and PING and PGA TOUR for golf apparel. Perry Ellis International Inc. has a market cap of $107.45 million; its shares were traded at around $6.84 with a P/E ratio of 4.58 and P/S ratio of 0.12. Perry Ellis International Inc. had an annual average earning growth of 11.9% over the past 10 years. GuruFocus rated Perry Ellis International Inc. the business predictability rank of 3.5-star.
Highlight of Business Operations:
Depreciation and amortization. Depreciation and amortization for the three months ended October 31, 2008 was $3.6 million, an increase of $0.1 million, or 2.9%, from $3.5 million for the three months ended October 31, 2007. Depreciation and amortization for the nine months ended October 31, 2008, was $10.9 million, an increase of $1.3 million, or 13.5%, from $9.6 million for the nine months ended October 31, 2007. The increase is primarily due to the increase in property and equipment, primarily from our Oracle retail system, and our continued expansion in retail stores.Interest expense. Interest expense for the three months ended October 31, 2008 was $4.4 million, an increase of $0.3 million, or 7.3%, from $4.1 million for the three months ended October 31, 2007. The slight increase in interest expense during the third quarter is primarily attributable to the increase of the average balance in our senior credit facility partially offset by lower interest rates. Interest expense for the nine months ended October 31, 2008 was $13.1 million, a decrease of $0.8 million, or 5.8%, from $13.9 million for the nine months ended October 31, 2007. The overall decrease in interest expense is primarily attributable to the overall reduction of the average balance and average rate in our senior credit facility for the nine months ended October 31, 2008. We began the first fiscal quarter of 2009 with no borrowings on our senior credit facility and ended the third quarter with $48.2 million as of October 31, 2008.
Net cash used in operating activities was $7.1 million for the nine months ended October 31, 2008, as compared to cash provided by operating activities of $52.7 million for the nine months ended October 31, 2007. The decrease of $59.8 million in the level of cash provided by operating activities for the nine months ended October 31, 2008, as compared to the nine months ended October 31, 2007, is primarily attributable to a decrease in net income of $9.6 million, an increase in accounts receivable of $14.0 million, an increase in prepaid income taxes of $8.2 million, and the reduction of accounts payable, accrued expenses and other liabilities in the amount of $22.1; partially offset by a decrease in inventory of $16.7 million due to tighter controls in inventory planning and an anticipated reduction in certain replenishment programs. For the nine months ended October 31, 2007, accounts receivable decreased $10.4 million, inventory decreased $17.1 million, and unearned revenues increased $16.8 million; these amounts were offset by the reduction of accounts payable, accrued expenses and other liabilities in the amount of $17.9 million.
Net cash used in investing activities was $42.5 million for the nine months ended October 31, 2008, as compared to cash used in investing activities of $12.2 million for the nine months ended October 31, 2007. The net cash used during the first nine months of Fiscal 2009 primarily reflects the purchase of property and equipment in the amount of $8.5 million and the acquisition of the C&C California and Laundry by Shelli Segal brands and inventory for $33.6 million, as compared to net cash used in the amount of $12.2 million during the same period in Fiscal 2008 for the net purchase of marketable securities and property and equipment. We anticipate capital expenditures during fiscal 2009 of $12 million in technology and systems, retail stores, and other expenditures.
Net cash provided by financing activities for the nine months ended October 31, 2008, was $45.5 million, as compared to net cash used in financing activities for the nine months ended October 31, 2007 of $38.1 million. The net cash provided during the first nine months of Fiscal 2009 primarily reflects the net borrowings on our senior credit facility of $48.2 million and the proceeds received from the exercise of stock options of $3.8 million, offset by the payments of $1.3 million on our mortgages, purchase of treasury stock of $5.7 million and a payment of a loan to a minority interest partner of $0.6 million. The net cash used in financing activities for the nine months ended October 31, 2007, primarily reflects the net payments on our senior credit facility of $38.3 million. The use of cash was offset by proceeds received from the exercise of stock options of $0.7 million. In September 2008, the Board of Directors extended the stock repurchase program, which authorizes us to repurchase up to $20 million of our common stock for cash over the next twelve months. Although the Board of Directors allocated a maximum of $20 million to carry out the program, we are not obligated to purchase any specific number of outstanding shares, and will reevaluate the program on an ongoing basis. Purchases under this plan have amounted to $9.8 million through October 31, 2008.
In October 2008, we amended our senior credit facility. In connection with the amendment, we paid approximately $338,000 in financing fees. These fees will be amortized over the term of our senior credit facility. The following is a description of the terms of our senior credit facility with Wachovia Bank, National Association, et al, as amended, and does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions of the senior credit facility: (i) the line is up to $125 million with the opportunity to increase this amount in $25 million increments up to $200 million; (ii) the inventory borrowing limit is $75 million; (iii) the sublimit for letters of credit is up to $40 million; (iv) the amount of letter of credit facilities available outside of the facility is $110 million and (v) the outstanding balance is due at the maturity date of February 1, 2012.
Read the The complete Report
More on PERY:
Gurus buys and sells of PERY
10-year financial history of PERY.
Insider buys/sells of PERY.
